Sunday, 3 January 2010

Gordon Brown unveils £100bn wind farm gamble

Danny Fortson

GORDON BROWN will this week launch a £100 billion green power revolution when he awards a raft of development contracts to build a new generation of offshore wind farms.
The government envisages a third of the UK’s energy coming from wind power by 2020. The plan is far and away the most ambitious in the world and comprises the central plank of the country’s efforts to cut emissions.
It revolves round the construction of nine enormous offshore wind farms on parcels put up for auction by the Crown Estate, owner of the UK’s territorial seabed. The sites will cost more than £100 billion to develop.
The prime minister is expected to use the announcement of the winners, to be made at an event in Exeter, to highlight the employment and economic benefits of the programme. The British Wind Energy Association (BWEA) estimates it will create up to 60,000 jobs.

The bidders, including the big six utilities and foreign energy groups, have already been informed of what they have won but have been forbidden from publicising details until Brown makes the announcement.
The closing of the auction is the first step on a long journey. Utilities haven’t finished building farms on sites that were granted in two previous auctions. Industry experts don’t expect construction to start on the new sites until at least 2015.
Each of the sites are bigger than anything in operation today. The biggest will be at the Dogger Bank zone, located 100km off the east coast. A farm on that site could generate 10GW of power — more than 10 times the capacity of total global offshore wind power in operation today.
At today’s prices that project alone would cost £35 billion. A consortium including RWE Npower, Scottish and Southern Energy, and Norwegian energy groups Statkraft and StatoilHydro is thought to have won the rights to develop it.
Other likely winners include Scottish Power and Vattenfall, a state-owned Swedish power group. The two are understood to have been given the rights for a 5GW parcel off the Norfolk coast. The Aberdeen firm Sea Energy and its partner EDP, the Portuguese utility, are thought to have been awarded a site in the Moray Firth in Scotland.
Mainstream Renewable Power, a start-up chaired by Fintan Drury, the former chairman of Paddy Power, the bookmaker, is understood to have won the rights to the Hornsea site near the Humber estuary. Eon has been awarded a parcel, as has Centrica.
Companies had to submit detailed reports on the power-generating potential of each site. Brown is expected to say that the nine sites will be capable of producing more than the previous estimate of 25GW.
Yet big questions remain over the wisdom of betting so heavily on an intermittent and largely untested power source sited in one of the harshest operating environments, the sea. Andy Cox, energy partner at KPMG, said: “There remain a lot of issues that are still not fully understood. Reliability has got to be the biggest.”
Indeed, around the world there is less than 1GW of installed offshore wind power, according to the BWEA, equal to a single gas or coal-fired power station. These new sites will be farther out at sea and in deeper water, making maintenance harder.
Cox added: “If a gearbox goes down in November, it [the turbine] is going to be shut down for the whole of the winter.”
Companies will have to lay hundreds of miles of undersea cable to connect them to the grid and the electricity network will have to be upgraded substantially to handle the inconsistency of wind supply.
Funding is also going to be an issue. Utilities are already struggling to find the money for today’s smaller projects. The government recently extended a subsidy scheme, among the most generous in the world, to projects that are operating by 2014.
That does nothing for these giant round-three projects. The industry has already begun lobbying to have aid extended well beyond 2014 because the building costs are so much higher than for conventional power plants.
Despite the challenges, companies are piling in. According to the European Wind Energy Association, 2008 was the first year that investment in wind outstripped investment in all other types of energy infrastructure in Europe.

Wave of protest over tidal power charges

Energy regulator Ofgem’s bills have put the Pentland Firth wave farm scheme at risk
Mark Macaskill

Plans to build Europe’s biggest wave farm off the coast of Scotland are under threat after energy firms threatened to pull out over “unfair” charges to connect to the national grid, a lobby group has claimed.
The Scottish Council for Development and Industry (SCDI) said that some of the 20 firms involved in the project, in the Pentland Firth, have said that they may withdraw in protest at the charges imposed by Ofgem, the energy regulator.
Under the charging scheme, electricity generators are forced to pay more the farther away they are from the national grid and urban centres.
According to the council — an independent body that represents 1,200 businesses, trade unions and local authorities — Scottish generators pay about 40% of total UK transmission charges, but produce just 12% of the country’s renewable energy. It claims they pay £100m a year more than their “fair share”.
The threat of firms pulling out will be a blow to Alex Salmond, who has claimed that the farm could transform the Pentland Firth into “the Saudi Arabia of marine power”. The first minister used his new-year message to call for a cut in connection charges, which he claimed were preventing Scotland from becoming the “energy powerhouse of Europe”.
The SCDI has raised its concerns in a policy report for ministers that urges Ofgem to consider a flat-rate scheme, irrespective of location.
“Wave and tidal companies involved in the Pentland Firth process face higher generation costs than established technologies such as onshore wind,” the SCDI submission states. “They have emphasised that without projects remaining viable they will not proceed and the locational charging regime could destroy viability.”
Gareth Williams, the head of policy at the SCDI and author of the report, added: “We are concerned that higher charges are proposed for renewables projects in Scotland where there are the best resources. Onshore wind projects already face far higher transmission charges and members in the marine energy industry have warned that higher connection charges will become a disincentive for investment in developing offshore wind, wave and tidal projects in Scotland.”
Jim Mather, the energy minister, said attempts to encourage the growth of the renewable energy sector in Scotland were being hampered.
“Our aim is to ensure that Scotland has a transmission network that will allow the massive marine-energy potential to be harvested and transported to centres of demand and exported to the rest of the UK and Europe, creating jobs and helping transform Scotland to a low-carbon economy,” he said. “That is put at risk by a locational charging regime that discriminates against remoter areas.”
Although few have gone public, Statkraft UK, a wind-farm developer, said earlier this year that it had shelved plans for a farm on Orkney, blaming high transmission and connection costs.
The Pentland Firth, between the north of Scotland and Orkney, is considered a prime location for tidal power. The channel is up to 90m deep and flows into and out of the North Sea twice a day, with water flows of up to 3m tons per second.
It is the first stretch of water off the UK to be opened up for development of marine renewables, and will host hundreds of wave energy devices, such as tidal turbines. At least 700 megawatts of wave and tidal capacity could be installed by 2020, enough to power more than 500,000 British homes.
A spokesman for Ofgem said: “The location-based, transmission-charging methodology results in charges for generators that reflect the costs they impose on the electricity system. This is in the interests of consumers.”

Fuel to the fire

As work starts on one of Europe’s biggest incinerators, it’s become a hot political topic as well as an eco one

John Burns

These days Dublin’s waste is a valuable commodity. It’s even fought over. Rights to the apple butts, dirty nappies and pizza crusts dumped in the capital’s bins have been disputed in the High Court. The city council is accused of being “greedy” and of “grabbing as much waste as it can”.
It may be leftover food or used plastic to you, but waste in Dublin has an extra dimension. It is potential fuel for the incinerator that the city council is building on the Poolbeg peninsula. The waste-to-energy plant, as the council prefers to call it, will have the capacity to burn 600,000 tonnes a year. Given that the Republic of Ireland produces about 3m tonnes of waste, of which more than a third is recycled, you can see why the city council would want to get its hands on as much rubbish as possible.
In that regard, it suffered a setback in the High Court before Christmas. Panda, a private recycling firm, challenged the council’s bid to change the waste-collection system so that only it, or a contractor it appointed, could pick up household rubbish. The council’s idea was to take control of all Dublin’s waste and burn it at Poolbeg. Justice Liam McKechnie ruled that this was in breach of competition law.
Typically, opponents of the incinerator responded with glee. “If [the city council] decides to disregard the implications of this judgment and proceed with the incinerator as planned, it will only dig itself into deeper trouble,” crowed John Gormley, the environment minister.
Brendan Keane, of the Irish Waste Management Association (IWMA), which represents private operators, said the council’s “attempt to grab control of waste” was “nothing more than a desperate effort to ensure that it has enough fuel to feed the Poolbeg incinerator”.
In this debate, size matters. While Poolbeg residents are worried about health and the number of trucks that will trundle out to the peninsula laden down with waste, these issues are now peripheral because the incinerator has both planning permission and a licence from the Environmental Protection Agency (EPA).
Gormley says the incinerator is “too big”; the IWMA that it’s “grossly oversized”. The city council says it’s just right. According to a spokeswoman: “600,000 tonnes a year is the amount of waste that needs to be diverted from landfill when we reach maximum recycling. The EPA says it’s sized correctly and An Bord Plean├íla thinks so too.”
The argument will intensify this year, and no detail is too trivial to ignore. For example, the IWMA has complained that a water fowl survey should be carried out at the site for “a period of at least one year, ie 12 consecutive months”. The council has done two separate six-month surveys, the IWMA grieves, but “it hasn’t actually done it for 12 consecutive months”. So it seems that Dublin city council will be fought on the beaches, on the landing grounds, in the rivers and the streams.
AN important fact about the Poolbeg incinerator is that it is in John Gormley’s constituency, Dublin South East. If he could, Gormley would stop it. But as environment minister he does not have that legal power. Knowing that they can gain an electoral advantage, Gormley’s political rivals, councillors and TDs, do not “accept” that the minister cannot halt the incinerator. Ever since his appointment in 2007, they have goaded him over this issue. Gormley would scarcely be human if he didn’t react.
“People think this is just a local issue, because it’s in his back garden, and that is why he’s objecting to the incinerator,” said a spokesman for Gormley. “That is not the case. The reason that he is so vehemently opposed is because of national waste policy. The incinerator is too big. Why are we building what will be one of the biggest incinerators in Europe to service a medium-sized city?
“It runs the danger of doing two things. First, it could fossilise the waste streams, acting as a barrier against innovation and new forms of waste treatment. This has been a feature in countries that have a high incineration capacity, including in Scandinavia. Secondly, the minister is concerned that there could be significant competition issues. You’ll have one facility with the capacity to deal with one-fifth of all waste in the country.”
Unable to kill off the incinerator with a clean blow, Gormley is toying with ways to cut off its oxygen. He might, for example, put a cap on the amount of waste that can be incinerated in Ireland. Or he could re-write national waste policy, which since 1996 has had incineration at its centre.
Instead, he has chosen another tactic. The city council has guaranteed to provide Covanta, the American developer of the incinerator, with 320,000 tonnes of waste each year. According to the contract it has signed, it must pay a penalty of €100 per tonne less than that amount.
The council insists this will never be a problem. “There will be no penalty as long as Covanta gets waste from somewhere,” it says. But Gormley is concerned that “a liability for the ratepayer and taxpayer may ultimately arise”. As it’s a 25-year contract, “any liability is potentially substantial”.
The minister once mused aloud that the city council might only be able to deliver half of the promised 320,000 tonnes. “If that is the case, we are looking at a liability [of] about €18m a year for about 20 years,” Gormley said. That back-of-the-envelope calculation was immediately seized on by opponents of the incinerator and the figure bandied about as if it were inevitable.
Last month, Gormley said he would appoint an inspector to “conduct a full review of the financial implications of the project for the state”. The inspector will be appointed after a “selective tendering process” — in other words, three or four people will be asked to bid for the work. Given the context, such a restrictive way of choosing an inspector may undermine his findings.
IWMA’s real concern about why the Poolbeg incinerator should not be built is commercial. Its members include Indaver, which is building a rival incinerator in Meath. Other companies have invested heavily in a form of waste disposal that may be made redundant by a giant furnace in east Dublin.
“They are concerned that the Poolbeg operator could offer incineration for next to nothing, driving them out of business and causing job losses,” said a spokesman for the waste companies. “We are not opposed to incineration — there is residual waste that has to be dealt with, because you can’t recycle everything. We are simply saying that the incinerator is twice as big as it should be.”
The city council not only argues that the incinerator is “appropriately sized”, it also rubbishes a favourite argument of opponents — that it will have to source waste from as far afield as Cork and Donegal to feed the monster in Poolbeg. There will be no need to go outside Dublin, it says.
John Tierney, the city manager, is hurt at Gormley’s criticisms. He points out that local authorities in Dublin have been following government policy, as set down in 1996 when Gormley wasn’t even a TD. The council has checked every move with the government first.
“The minister said on December 21 that we should not have entered into the contract in the first place,” Tierney said. “He must be aware that we are under a statutory obligation to implement the objectives of the Waste Management Plan. At all stages our actions were approved by the Department of the Environment and were in accordance with Department of Finance guidelines for public-private partnerships.
“The government was advised by me of the signing of the contract in 2007, and that this was a result of government policy. And I have consistently advised of the potential implications of interfering with the contract, including the compensation that could arise from terminating it.
“I have no indication of a willingness by government to take on the liability for altering the contract, or a change in policy direction that has the same effect.”
Essentially, Tierney is challenging Gormley: if you want us to cancel the incinerator deal with Covanta, give us the millions of euro compensation that we’d have to pay; and if you really want to stop the incinerator, change government policy on waste.
That would mean, of course, that Gormley would have to convince his Fianna Fail cabinet colleagues. The idea of either the government or Dublin city council paying millions in compensation to an American company is unlikely to win favour in the Department of Finance, to say the least.
Privately, some Gormley supporters say the council is “scaremongering” about the amount of compensation that would have to be paid to Covanta. “There are various clauses in the contract that allow the parties to walk away,” one said. “There could be some costs, but it’s a case of who blinks first, who withdraws. The council could do it in a way that would attract a high penalty, but there are other ways.”
The contractors moved on-site in mid-December, but so far there has been little work done at Poolbeg. That is set to change this spring. Gormley’s inspector should report back before the summer, but as with so many political disputes in Ireland, the courts may eventually sort it out.
The city council will not decide whether to appeal against the McKechnie ruling until at least February, when the final judgment is published. “The upshot [of McKechnie’s ruling] is a free-for-all in the waste market,” Tierney said. “This is unlike the position in most European countries. It is recommended [internationally] that there be competition for the market rather than in the market, and we presume the minister [Gormley] agrees with this.”
While the city council contemplates going to the Supreme Court, emboldened by its legal victory, private waste companies could launch a direct court challenge against the incinerator itself. Meanwhile, government sources expect that anything Gormley does to stop the incinerator will be challenged by Covanta or the city council by way of judicial review.
“Either way, I think it will end up in the courts,” one source said. Waste, the most disputed commodity in Dublin, is going to be fought over a while longer before it gets burnt.

‘Scarecrow’ wind farms put rare birds to flight

Jonathan Leake, Environment Editor

Britain’s upland birds are in danger of being driven off hills and mountains by onshore wind farms.
Scientists have found that birds, including buzzards, golden plovers, curlews and red grouse, are abandoning countryside around wind farms because the turbines act as giant scarecrows, frightening them away.
The impact is small now because there are few wind farms but researchers warn that, with hundreds more planned, plus an increase in the size of turbines, the effect could become much worse.
“We found evidence for localised reductions in bird breeding density around upland wind farms. Importantly, for the first time, we have quantified such effects across a wide range of species,” said James Pearce-Higgins, an ecologist with the Royal Society for the Protection of Birds in Scotland.

His research was conducted with scientists from Scottish Natural Heritage and the Scottish government’s environment research directorate. It is one of the first scientific analyses of how the wind-farm construction programme might affect wildlife.
The UK has 259 onshore wind farms, of which 108 are in England, 91 in Scotland, 33 in Wales and 27 in Northern Ireland. Planning permission has been granted for a further 222 and there are plans for another 270 after that.
In the study Pearce-Higgins surveyed the populations of 12 bird species around a dozen upland wind farms in Scotland and northern England.
These were compared with a similar number of control sites that had no turbines, but which had similar topography and vegetation.
Upland areas were chosen because they have the strongest winds and so are preferred by wind-farm developers. They are also favoured, however, by some of Britain’s most vulnerable bird species.
Writing in the Journal of Applied Ecology, Pearce-Higgins and his colleagues said birds tended to stop nesting within half a mile of any turbine. Since the effect extends around each machine, up to two square miles could be affected by one turbine.
Pearce-Higgins said: “Our results highlight significant avoidance of otherwise apparently suitable habitat close to turbines in at least seven of the 12 species studied, with equivocal evidence for avoidance in a further two species.”
The RSPB does not oppose wind farms but wants them sited away from areas where birds feed or breed and from migration routes. Pearce- Higgins said: “This work lets us assess prospective sites more accurately.”
It follows planning failures in America, Spain and Germany where the wind-farm boom has seen them built in prime bird areas. The danger is that the birds will be caught in the blades of a turbine: one wind farm in Altamont, northern California, has been blamed for killing 1,300 migratory birds of prey a year.
The British Wind Energy Association has said the idea that UK wind farms affect birds is a “myth” and warns that climate change is a far greater threat.

Run your car on recycled rubbish

A new type of process can turn waste into bioethanol
Danny Fortson

Yesterday, like every day, you produced 3lb of rubbish. A third of it will be recycled, and some of it will be burnt. Most of it, though, will be tossed into a hole in the ground to rot away over several decades.
As it decays it will generate methane, a greenhouse gas 23 times more harmful than carbon dioxide, and leachate, a putrid black liquid that must be pumped out of the ground to keep it from fouling the water table. Some material, such as plastics, will never break down fully.
The government is, belatedly, trying to change Britain’s standing as among the worst recyclers in western Europe. It has imposed a swingeing landfill tax that is rising every year. The scramble to avoid it has led to a new generation of rubbish tycoons, all hoping to cash in on the move to waste less and recycle more.
One of them is Philip Hall. The 62-year-old serial entrepreneur has developed a technology that converts waste into bioethanol, a green alternative to petrol. His company, Reclaim Resources, built its first demonstration plant in Bournemouth last year.
The idea came to him in 2005, when an incinerating company asked his previous firm, X Technology, to fit its odour-control kit to its ovens.
Hall said: “We either set fire to our garbage or bury it. I thought, there has to be a better way.” The result was Reclaim’s Vantage Waste Processor, which blasts rubbish with high-pressure steam as it passes through a giant rotating cylinder. The process breaks down all organic material into fine fibres with high calorific value. The plastic and metal is removed and taken away for recycling.
The biological leftovers are converted into sugars through hydrolysis and acid treatment and then fed into large fermentation tanks. These break them down into fuel that can be blended for use in cars and aircraft or to feed the gas turbines of a power station.
Turning the country’s waste into a limitless source of biofuel sounds too good to be true — and so far that seems to be the view taken by Britain’s councils and developers.
The company’s handful of orders are all from foreign firms. “I have to say the UK has been pretty disappointing,” said Hall. “The real interest is coming from the developing world — China, Malaysia, Russia. I imagine the first 30 plants will be built overseas before we have one running in England.”
What is certain is that Britain needs to do better with its waste. We bury 58% of the 220m tonnes of waste we produce every year. By 2013, landfilling must be cut to half of 1995 levels. If that level is not achieved, Britain will violate the EU landfill directive and be subject to hefty fines.
To prod the industry into action, the government has raised landfill taxes and offered generous subsidies for waste-to-energy developers. AMA Research, an American consultancy, said Britain will have to invest £30 billion to put the infrastructure into place.
Apart from Reclaim’s demonstrator plant in Bournemouth it has made only one other unit and is near to completing a third in Latvia, where labour costs are a fraction of those in Britain. Hall has sunk £3m of his own money and cash from private investors into the company and is now trying to raise another £10m to step up production.
Hall’s is just one of a handful of waste-to-energy alternatives being developed. Anaerobic digestion, for example, uses giant steel tanks filled with microbes to break down organic waste. J Sainsbury, the supermarket group, is building several anaerobic digestors to get rid of date-expired food. The process takes 40 days.
Reclaim, on the other hand, takes only three days to start producing ethanol and then its plant can operate continuously.
A syndicate of underwriters has enough confidence in the technology to offer performance bonds covering loss of income in case the ethanol production is less than capacity. “As long as there is a continuous waste source,” Hall said, “it’s like a tap.”

Scottish HQ for Logan Energy

Kenny Kemp

Logan Energy Limited (LEL), an industry leader in low-carbon fuel cells, has moved to Scotland to capture a surge of interest in greener energy technology.
The company, a sister of Logan Energy Corporation of the US, is now based in Edinburgh and has operated in the UK for more than three years. It recently installed a 200kW fuel cell at Transport for London’s Palestra building, LEL, previously based in Nottingham, has also been commissioned to design install and operate a pilot 200kW combined cooling, heat and power fuel-cell project at the new southern operations centre of Scottish and Southern Energy in Havant, Hampshire.
SSE has a 21% stake in LEL along with Scottish Enterprise’s Co-investment Fund. SSE also invests in Intelligent Energy, a fuel-cell development company.
Bill Ireland, the operations director of LEL, said: “We are seeing increased interest in fuel-cell technology as organisations realise their responsibilities to decrease the impact on the environment.

“Fuel cells have been around for a long time. What is new is the cost per kilowatt, which has dropped substantially.”

Shell accused of abandoning solar power buyers in the developing world

Row over responsibility for sold-off systems has left Sri Lankan communities unable to replace faulty equipment
Terry Macalister
The Observer, Sunday 3 January 2010
Shell has become embroiled in a major row with the World Bank and green energy companies after allegations that it is unfairly refusing to honour warranties on solar power systems sold to the developing world.
A widespread breakdown of its equipment in Sri Lanka and elsewhere has left the oil firm accused of abandoning a responsibility to impoverished communities while damaging the prospects of the wider renewable power sector in a world desperate to reduce carbon emissions following the Copenhagen climate change summit.
The rural electrification business under which the Shell systems were sold has now itself been passed on – as have most other parts of the group's solar business – but critics say that Shell, which made profits of $31bn in 2008, has a continuing role in ensuring former customers are not left vulnerable.
"Shell exited solar on a global basis, seemingly without due consideration to how after-sales service and warranty replacements would be provided, thereby damaging the very local solar industries it had earlier helped to create," said Damian Miller, a former Shell manager who now heads his own solar business, Orb Energy.
"In Sri Lanka, poor customers with average earnings of $1,500-$2,000 a month have bought Shell's solar systems. The system is equivalent to 30% of their annual income," he added. "They could only afford a system because they could get a loan from microfinance institutions or other banks. But now there are reports of thousands of Shell's [branded] solar panels failing in the field and Shell seemingly is not replacing them."
The World Bank, which provides financing packages to the developing world, said it too was very worried about a situation in which about 700 solar systems appear to have failed and local suppliers risked going out of business.
Anil Cabraal, an energy specialist at the bank's Washington headquarters, has written to Shell asking for action. "I would like Shell to honour these commitments. We are not talking about millions of dollars here but hundreds of thousands," he told the Observer.
The company argues that it is being unfairly targeted and is doing all it can to sort out the problem. It points out that its Shell Solar Sri Lanka business has been transferred to a third-party purchaser, Environ Energy, along with all liabilities. The Anglo-Dutch oil group says the bulk of its former solar module manufacturing operation has also been switched to a new owner, Solar World.
"In October 2007, Shell sold Shell Solar Lanka Ltd to Environ Energy Global PTE Ltd. Specifically in order to protect customer interests, the terms of the transaction explicitly covered the management of all past, present and future liabilities, including warranty issues," said a Shell spokesman in the Hague.
"Environ Energy Global understands that resolution of this issue rests with Environ, but [its] own management team in Sri Lanka continues to approach Shell. We have asked Environ Energy Global to clarify responsibilities with [its] own management team in Sri Lanka."
The situation has been complicated by the fact that Environ claims Solar World will not replace any modules unless it has the appropriate warranty documents. Environ claims those papers were destroyed by Shell prior to the handover to Solar World, although Shell told the Observer this was not true.

Hydrogen cars come one step closer to the mass market

Mercedes-Benz announced this week that it has started production of the B-Class F-CELL, its first series-produced electric car with a fuel cell.
Initially, the firm plans to build 200 models which will be delivered to customers in Europe and the US from spring 2010. The B-Class is an evolution of the company's A-Class F-Cell, unveiled back in 2004 and currently in active service at the COP15 conference in Copenhagen.
Mercedes-Benz claims that the B-Class F-CELL will have a range of up to 400 kilometers (248 miles), with a 136 horsepower electric motor delivering performance comparable with that of a 2.0 litre gasoline car. Top speed will be 170 kph (105 mph). The vehicle will also be able to start at temperatures as low as -25°C (-77°F), traditionally an area of concern with fuel-cells, which use internal vapor at risk of solidifying below freezing point (0°C/32°F). The B-Class overcomes this by taking electrical energy from an on-board battery as it warms up in cold temperatures.
German car-maker Mercedes-Benz is the latest entrant to the fuel-cell market, which is only just beginning to move from theory to reality. Lack of a hydrogen infrastructure such as filling points is still a major issue for the fledgling industry, although several energy suppliers are believed to have plans for a network in the pipeline. Honda was the first manufacturer to bring a production fuel cell vehicle to market with the FCX Clarity which is currently for sale or lease in Los Angeles, US and Japan. Mercedes-Benz is also planning to offer the first B-Class models to select customers through a leasing program.